Quarterly review: The rebound takes its first pause

Since March 2020, stock markets have been on a steady upward path, chalking up record gains as the world has slowly been coming to terms with the pandemic and getting it under control. So far this year the Canadian market is up 17.5%, the U.S. 14.4%¹ and the rest of the world (excluding North America) is up 4.5%. These strong returns are despite a negative month of September, which was the first month in quite a while that saw stock and bond markets turn downwards.

It’s important to remember that markets couldn’t keep rising at the pace they were going forever, a negative month was going to happen sooner or later.

So, what happened to unsettle investors in September? The US Federal Reserve and other central banks have been accelerating the schedule on which they expect to reduce their stimulative policies. The US congress is engaging in yet another round of brinksmanship in over the US debt ceiling, which has been temporarily averted until December. Finally, after a great 2020, the Chinese stock market is suffering from heavier government intervention in the education, technology, and real estate sectors, creating broader concerns about the future of the Chinese economy.

The economic recovery from the pandemic recession won’t be a smooth ride. However, as this article notes, there’s also a lot of good news for the stock market right now, including good progress in the fight against COVID, huge gains in household wealth and strong corporate profits. US GDP has exceeded its pre-pandemic high, and Canada has now recovered all the jobs lost during the crisis.

We rebalanced portfolios in the spring and are doing so again, to make sure we don’t give up the strong gains made so far this year.

Source: FTSE Russell, S&P & MSCI

In other news, we added some talented new members to our team during the quarter:

• Adam Perez, Operations Administrator—Adam is responsible for preparing account paperwork, sending e-signature packages and our new online risk profiling system. With a Bachelor of Commerce from Concordia University and experience in commercial lending at BMO, he’s done a great job of ensuring we stay on top of account compliance in an increasingly demanding regulatory environment.

• Olivia Desiatnyk, Wealth Management Analyst—Olivia will support with preparation and note taking in client meetings. She has a Bachelor of Science in Math, Physics and Environmental Science from the University of British Columbia and is working towards her Investment Advisor designation. Olivia comes to the team following her experience at an accounting software start-up.

• Kelly Moore, Manager, Business Operations—Kelly is responsible for account compliance, reporting and administrative client services, as well as special projects. She has 12 years of experience with the federal government, most recently as manager of a fiscal policy team at Crown-Indigenous Relations and Northern Affairs Canada. Kelly has a Bachelor of Arts from Queen’s University and a Master of Arts degree from Maastricht University in the Netherlands.

We hope you have an enjoyable autumn! As always, if you have any questions or concerns, please don’t hesitate to contact us.

Best regards,

Peter Guay

¹ Source: FTSE Russell, S&P & MSCI